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The ADA: how it affects firms and their clients.

The provisions of the Americans With Disabilities Act (ADA) affect CPA firms' relationships with clients as well as with employees. Because they provide services to the public, all CPAs, including sole practitioners working out of their homes, must allow access for disabled clients. (For a discussion of the law's employment provisions, see "The ADA: How it Affects Businesses and Their Employees," on page 73.)


All public accommodations, including accounting firms, retailers, physicians and others serving customers and clients, must

* Refrain from discriminating against disabled clients.

* Provide auxiliary aids, if necessary, to disabled people.

* Make readily achievable changes in their buildings and offices to increase accessibility for disabled people.

* Construct new buildings and engage in major renovations to older facilities to maximize accessibility to disabled individuals.

The rules on nondiscrimination, auxiliary aids and readily achievable changes apply beginning January 26, 1993, to professional firms, retailers and service companies with 10 or fewer employees and annual gross receipts of $500,000 or less. Firms with 11 to 25 employees and annual gross receipts of $500,000 to $1 million must comply with the law six months earlier, on July 26, 1992. All larger entities were required to comply as of January 26, 1992. The rules on renovations and alterations apply to any work begun after January 26, 1992, while those for newly built structures apply to final building permits that are granted after January 26, 1992, when the first certificate of occupancy occurs after January 26, 1993.

ANTIDISCRIMINATION RULES CPAs can't refuse to accept clients because they are legally disabled. However, a firm may refuse a disabled client if it is not taking any new clients due to a work overload or if the firm doesn't perform the services being requested. For example, a CPA can refuse to prepare the tax returns of someone with AIDS if the CPA normally doesn't do tax preparation, but the engagement can't be refused because the client has AIDS.

In other words, accountants must treat disabled clients as they would if the people were not disabled. However, the ADA does not prohibit discrimination against current drug abusers, homosexuals, people with psychoactive substance abuse disorders or most sexual behavior disorders or against compulsive gamblers or kleptomaniacs. Under the law, then, a client who can't be turned away because of a disability may possibly be refused for another reason.


CPAs must provide necessary auxiliary aids to ensure the disabled receive service equivalent to that given nondisabled clients. Examples cited in the ADA include providing qualified interpreters for the hearing impaired, supplying qualified readers or taped texts for visually impaired people and buying or modifying equipment. Examples of such equipment include computer printers that print in Braille and conventional type ($900); Kurzweil Reading Machines, which convert printed words into Braille or synthesized speech ($8,000 to $12,000, depending on optional features); and telecommunications devices for the deaf, which enable the hearing impaired to communicate using the telephone ($150 to $1,000, depending on options). This seemingly expensive requirement has two major exceptions.

1. It's not necessary to furnish auxiliary aids that create an undue burden. For example, a firm needn't have a full-time interpreter for the deaf, because the expense would far outweigh the benefit to an occasional deaf client. However, if standard information is given to clients orally, it is reasonable to have the materials printed for deaf clients' use.

2. An auxiliary aid isn't required if there is an equally effective and less-expensive alternative. For example, printed materials for clients needn't be converted into Braille if staff are available to read them aloud to blind clients.

Effectiveness is the key in decisions on alternatives. It may be possible to communicate with a deaf client about simple matters using a pad and pencil but not about estate planning or a pending tax audit. When effective communication requires an interpreter for the deaf, the firm must obtain and pay for one. Clients can't be charged for auxiliary aids, but they may have access to agencies that provide them at no charge.


The ADA requires removing architectural barriers in offices to improve accessibility if such changes are readily achievable. Readily achievable changes are defined as "easily accomplishable and able to be carried out without much difficulty or expense." Examples include installing ramps, making curb cuts, rearranging desks and tables, providing grab bars and raised toilet seats in rest rooms, removing high-pile carpeting and installing flashing alarm lights.

There are no clear financial standards for determining what is readily achievable. However, a Justice Department guidance says supplying a ramp for one step is readily achievable, while supplying one for an entire flight of steps may not be. It also says this requirement is ongoing. Changes not readily achievable in one year should be made gradually over several years. A written, long-term plan to remove barriers over a period of years is evidence of a good-faith effort to comply with the law.

The difference between the requirement to provide auxiliary aids and make readily achievable structural changes is important. Financially, an auxiliary aid is required unless it creates an undue burden-a large expense. Structural changes are readily achievable and therefore required only if a minor cost is involved.


Office renovations and alterations must comply with the detailed, 86-page "ADA Accessibility Guidelines for Buildings and Facilities" that may be obtained from the Department of Justice's ADA information line at (202) 514-0301. The guidelines give exact measurements on thousands of building requirements involving, for example, door widths, flooring surfaces, restroom space, sinks, water fountains and ramps. Altered or renovated areas are required to conform to the guidelines "to the maximum extent feasible."

If only a portion of a firm's offices is being renovated, the firm also must alter the "path of travel" from the entrance to the altered section. This may be done by widening the front door, removing high-pile carpeting in the reception area, lowering a water fountain in a hallway leading to the renovated section or rearranging furniture for wheelchair access.

Justice Department regulations limit the cost of this requirement to 20% of the original renovation expense. For example, if $100,000 is spent renovating individual back offices, alterations improving accessibility are not required to exceed $20,000.

Changes that force conformance to the accessibility and path-of-travel requirements include remodeling, renovation, reconstruction and moving walls or full-height partitions. Changes that do not trigger these requirements include normal maintenance, painting, wallpapering, asbestos removal and alterations to areas that clients do not use.


All newly constructed buildings for commercial use and facilities must be fully accessible to disabled people. Detailed requirements are covered in the "ADA Accessibility Guidelines. "


Many CPA firms and small businesses may be entitled to tax credits under Internal Revenue Code section 44 for the costs of modifying structures, providing auxiliary aids or incurring other expenses to make services more accessible to disabled clients. The credit is one-half of annual costs between $250 and $10,250. To qualify, firms must have annual gross receipts of $1 million or less or fewer than 31 employees. Meeting either test qualifies the firm for the credit.

Expenditures that don't qualify for tax credits may be deducted as current expenses under IRC section 190. The maximum allowed current expense is $15,000 per year. (Tax information is available from the ADA information line given above.)


Both landlords and tenants must comply with the ADA. However, each is allowed to allocate compliance obligations in rental agreements or leases.

If the responsibility allocation isn't documented, the following rules are likely to apply:

* The tenant must comply with auxiliary-aid requirements.

* The tenant must improve access by making readily achievable changes that don't alter the structure, for example, moving desks and equipment.

* The tenant is responsible for readily achievable changes in the office structure if the lease allows them. If it does not allow changes without the landlord's consent, the tenant is obligated to attempt to gain permission to accomplish the alterations.

* Generally, the landlord is liable for required changes necessary in common-use areas, such as hallways and lobbies.

* The obligation to meet ADA requirements in office renovations falls on whoever controls the renovation work.

* Path-of-travel requirements imposed because of a tenant's partial renovation normally apply only to the path of travel leased by the tenant.

* ADA rules on new structures normally apply to the landlord. However, if the structure is built after a lease agreement between the landlord and tenant, especially when built to the tenant's specifications, both are responsible.


Anyone who believes he or she has been harmed or is about to be harmed by violations of the law's public accommodations section can sue in federal court for a court order forcing compliance, plus an award of attorneys' fees and costs.

The Department of Justice can receive complaints of ADA violations and conduct inspections and file lawsuits. Justice Department lawsuits may result in compliance orders, monetary damages to those harmed by past violations and civil penalties of up to $50,000, or up to $100,000 for a second violation.


CPA firms should take eight steps to conform to ADA requirements on offices and treatment of clients:

* Perform an office survey to identify readily achievable accessibility improvements. The most common accessibility problems are encountered by those in wheelchairs. Therefore, it is helpful to have a person in a wheelchair examine the offices and make suggestions. To find someone to conduct the survey, firms can contact a local Disabled American Veterans chapter, vocational rehabilitation agency or other similar types of organizations.

* Adopt a year-to-year accessibility plan if all reasonable suggestions for low-cost, readily achievable changes cannot be accomplished in one year.

* Survey the firm to identify necessary auxiliary aids. Because this requirement affects mostly methods of communication between CPAs and clients, determine how to handle clients with hearing and vision problems.

* Be sure all firm employees know the rules against discrimination, especially those who accept and first meet new clients.

* Have the firm's attorney amend all new or renewed rental agreements to ensure the ADA compliance duty falls on the landlord. The clause should require the offices, building and adjacent premises to comply with all ADA requirements. It should contain a "hold harmless" clause in which the landlord promises reimbursement for any expenses the firm incurs because of the landlord's failure to comply with the ADA.

* Have the attorney revise all contracts with architects and builders, requiring compliance with the ADA and adding to them a hold harmless clause.

* When planning renovations, be sure contracts include path-of-travel alterations. Inform architects, construction companies or remodelers in advance that their plans, contract prices or bids should include not only the renovation work but also any required travel-path alterations.

* Encourage suggestions from disabled people. One of the best methods of avoiding legal problems is to ask people to complain to firm members before they go to the government or the courts. One way to inform clients of the firm's interest is to post the following sign in the reception room or entrance: "If you are disabled and you need any special help or accommodations, please tell the receptionist. Also, please inform us of any complaints or suggestions about our office accessibility or methods of accommodating your disability. We will try to remedy any problems."


* ALL ACCOUNTING FIRMS must comply with the public accommodations section of the Americans With Disabilities Act (ADA) in their dealings with clients.

* THE ADA REQUIRES firms to furnish auxiliary aids, such as interpreters for the deaf, make readily achievable changes in their offices and comply with strict accessibility renovation standards.

* THERE MAY BE INEXPENSIVE alternatives to providing auxiliary aids. For example, documents need not be printed in Braille for blind clients if someone can read them aloud.

* A LEASE MAY ALLOCATE ADA compliance duties. Firms should revise leases to place compliance duties on the landlord.

* PENALTIES FOR ADA VIOLATIONS can include damages to disabled people, a court order to remodel offices, and the payment of attorneys' fees and civil penalties.

* EFFECTIVE COMPLIANCE STEPS include surveying offices for accessibility, ensuring renovation and building contracts include ADA requirements and encouraging disabled clients to make suggestions or complaints to the firm.
COPYRIGHT 1992 American Institute of CPA's
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1992, Gale Group. All rights reserved. Gale Group is a Thomson Corporation Company.

Article Details
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Title Annotation:Americans with Disabilities Act of 1990
Author:Frierson, James G.
Publication:Journal of Accountancy
Date:May 1, 1992
Previous Article:The ADA: how it affects businesses and their employees.
Next Article:Understanding the FASB's new basis project: when should a reporting entity adopt a new basis of accounting for assets and liabilities?

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